Announcer: From the National Institutes of Health in Bethesda, Maryland, this is All About Grants.
Megan Columbus: Welcome to another edition of All About Grants. I’m Megan Columbus, your host from the NIH Office of Extramural Research. Today we’re here to talk about NIH funding decisions, specifically what happens should your budget get cut. I have with me today, Dr. Della Hann, Deputy Director of NIH’s Office of Extramural Research and Rebecca Claycamp, Chief Grants Managements Officer at the National Institute on Mental Health. I wonder if we could start with getting an idea of why budgets are cut on incoming competing applications, those being new and renewal applications that undergo peer review?
Rebecca Claycamp: Well the first place an application might be recommended for a cut is at the time of review. The review committee may make the conclusion that a particular cost is excessive or not necessary, and they will actually make a recommendation in the summary statement for a particular cost to be cut, for example, maybe cut one postdoc from the grant. While this is uncommon, it does occur, and we would follow through and remove that cost from actual the award should an award be made.
Megan: I want to point out that when we talk about the review groups looking at costs, they actually do this after applications are scored based on scientific merit, so budgets don’t impact scores at all. And so then the other point at which a competing application could get cut is when it is being considered for funding by the institute or center. What are the reasons that applications might get cut at this point?
Della Hann: Well, we have to always remember that when an institute decides to make a funding decision they’re looking at the scientific merit of the application, they’re looking at the priorities and mission of the institute, but the other thing, the big thing, is they have to see how much money they have. Sometimes institutes will make decisions based on their science that they will impose different levels of cuts, if you will, at the time of the competing award. Sometimes it’s used in order to be able to fund more science, essentially, to be able to pick up additional projects without drastically hurting any given project. So there will be decisions made at the time of award with regard to that, as well.
Rebecca: And in situations where those cuts are significant enough to change the science, in some cases perhaps they might even recommend cutting a specific aim. The whole application scored well, but in the interest of containing the science and containing the cost they may say, “Remove specific aim 3” and they would negotiate the cost down appropriately.
Megan: Who would the investigator be dealing with should that occur?
Rebecca: Well the actual negotiation should generally be occurring budgetarily with the grants management office, but the scientific negotiation will go on between the principal investigator, the grantee institution and the program officer.
Della: Because as Rebecca said earlier, in peer review they may not have made a recommendation for reductions of budget, but they may also indicate in the review statement that they were less enthusiastic about one particular aspect of the grant. And programmatically as a program officer in reading that through, one could then have a negotiation with the investigator to say, “Well there isn’t a great enthusiasm for this particular piece of it. What if that were to be dropped?” In so doing, that would have implications for budget. That could happen essentially as a consequence of the kinds of scientific comments that are coming out through the review process, that program could also have those kinds of negotiations.
Rebecca: Or even in a situation where perhaps one of the specific aims really doesn’t align itself as well with the institute’s mission. And in those cases, it underscores why it’s so important for a principal investigator not only to make themselves aware of the mission priorities of a given institute, but to have discussions with program officers well in advance of submitting an application to make sure that their science is aligned with the actual institute’s mission and priorities.
Megan: Should the aims of the project be negotiated down, what kind of documentation would be expected from the investigator or from the institution?
Rebecca: They will have to submit revised specific aims to detail exactly what they’re agreeing to reduce in terms of the science and then to accompany that a revised budget that would match the actual work to be done.
Megan: So what are the other reasons that budgets might be cut, that are more administrative in nature?
Rebecca: Well the more common reason that a budget is cut, outside of cost, is in the actual review of a budget, and that is after an application is selected for payment then the application budget is reviewed both by program and grants management. Program helps grants management understand if certain costs are scientifically appropriate. Then grants management will review the costs to determine their allowability, allocability and their reasonableness. Reasonableness is the easy one, but the other two usually provide confusion for people. Allowability is allowable both according to the terms of the FOA, in other words, certain costs may be considered unallowable for a particular funding opportunity, and it’s important for the PI to read the FOA carefully to be sure to not include costs that are unallowable. It’s also with regard to the cost principles where certain costs are allowable or unallowable in keeping with cost principles. That’s why it’s very, very important for a principal investigator to work both with their departmental administrator and their institutional grants and contracts offices, preparing budgets early so there’s time to review for issues of allowability, to make sure budgets are appropriate. And then issues of allocability, whether or not a particular item can be directly allocated to a particular budget. Let me give you an example of something. So an investigator says I would like to put my journal subscriptions in my grant budget. Generally speaking, that journal subscription cannot be directly allocated to that specific research. It has a common benefit over all the research, and in fact probably that investigator would be wanting to pay for those journal subscriptions regardless of whether they have the grant or not, so that generally is considered unallocable cost. And again, the institution, the departmental administrator, the grants & contracts office can help the investigator make those determinations.
Megan: So what would you recommend if as a PI I get a cut that I’m not expecting or that I’m not sure I can deal with? What would I do and, maybe more importantly, who would I call?
Rebecca: Let’s say that you have a cut that you weren’t expecting, the amount seems wrong. Calling your grant specialist to understand the nature of the cut. If certain items were considered unallowable would you have that explanation? And sometimes there are mistakes made where an amount was cut that should not have been cut and those monies can be restored, but it’s very, very important that those problems are identified at the time or very close to the time of the award. Because the point where the grantee draws down the first dollars on those grants they’re agreeing to the terms and conditions of the award, which also includes saying “Yes, the budget is right.” So if there has been a mistake it’s good to look over the very first notice of grant award is received and ask those questions.
Della: I think that really comes to play with cuts that are recommended by the peer review process. Because if in your summary statement you see that there’s a recommendation to have whatever cut from your budget for whatever reasons and you strongly disagree with that, that it would really harm the nature of the research that you’re trying to do, then having a discussion right at that very moment with your program person. You would want to do that even before the second tier of peer review (that is the council meetings meet) because that is the place where the restoration would occur. There would be obviously you would want to get your program person on board with all of that so that they can file the proper paperwork with the council to see whether or not they also agree that those funds could be restored. It’s a process that investigators really do need to monitor, first of all how they’re putting together a budget, that they’re talking with their own home institutions about what’s allowed, what’s not allowed, how to build a good, sound budget, and then to be monitoring that in addition to the science through the peer review process and working through program officials. If you believe that there are inconsistencies.
Megan: As a reminder to our listeners if you’re looking for your program official contact or your grants management specialist you’ll be able to find those in your eRA commons accounts. I’ve heard a lot of good advice today, some of which is recurring, some of which is -- as you prepare your budget read the application instructions, make sure you read the funding opportunity announcements, make sure you talk to the program official, make sure you understand the missions of the institutes. Is there any other parting advice that you might want to provide?
Rebecca: Start your budget early and give it time to ferment, as it were, because what frequently happens is a person knows the main cost, but they haven’t included all the costs. It’s after they’ve written the application that they remember certain needs that they’re going to have. It’s really important for an application budget to dovetail with the application. If something doesn’t seem to connect, that’s a cost that’s frequently going to be eliminated if it’s not well justified or isn’t seen as being integral to the actual research. And frequently, budgets done in a hurry at the last minute are missing vital cost elements. While one might think that, “Gee if I come in with a lower budget, maybe I’m more likely to get funded.” That’s a sure way not to get funded. So you want to have a budget be appropriate for the science.
Megan: And you would not to get funded because, A, you haven’t asked for the money, and, B, because the reviewers might think you don’t understand the scope of the project?
Rebecca: Exactly and you will see that in reviewer’s comments sometimes. That is their conclusion. The PI does not understand what is needed to do the science.
Della: Very often, I think, in working even myself when I was an investigator, I’m so caught up in my science, and I’m very excited to be able to move that forward, the budget pieces are something that I don’ t often think about. As Rebecca just said, they happen at the last minute. And, I think, particularly for newer investigators, building in those conversations earlier in the process in terms of talking with more senior investigators as well as your institutional officials who deal with budget can really be an ounce of prevention as one goes forward.
Rebecca: The last thing you want to do is estimate costs. It’s really so valuable to cost things out. Again, that investigator doesn’t need to do that themselves. They generally will have departmental administrators or institutional administrators who are much more experienced at doing that to help them.
Megan: Thanks so much for the great advice Rebecca, Della. For NIH and OER this is Megan Columbus.